Today I was with the Exco of a company doing a “strategy refresh”. One of the exercises we did was a stakeholder analysis. Who are the stakeholders – customers of various types, shareholders, bankers, suppliers, employees, regulators, etc.

We then asked “what is our planned offer for each of these stakeholders”. In other words, why should the stakeholder care about us? Interestingly, in the company concerned, there were a couple of stakeholders who did not care, and it was difficult to think of a way of incentivising them to care. Both were public/government organisations. Fortunately, neither was deemed critical to future success.

Getting clarity about what the company was offering each stakeholder took an hour.

We then asked which of these offers is difficult to deliver and why. As it turned out there were two particular stakeholders that were difficult to satisfy, mainly because of competition but also because one stakeholder influenced the satisfaction of the other, but was not prepared to invest anything to help raise satisfaction.

The process gave insights into the critical strategic challenge facing this company – an important ingredient of good strategy as argued by Richard Rumelt in Good Strategy Bad Strategy.

I have rarely found that an analysis of stakeholders does not give insights to those who do the analysis. What is more, it is an excellent starting point for operating model work.